More Australians are looking to spend rather than save money following weeks of new positive economic data pointing to a sustained economic recovery, a financial comparison company says.
RateCity has recorded an 84 per cent rise in applications for loans and credit cards in the three months to September, a survey of its business data shows.
“During the peak of the global financial crisis at the start of the year, Australian’s were holding onto their money and looking for the best accounts to secure a good return,” RateCity CEO Damian Smith said.
“We’re now seeing the opposite trend, as Australians are now more confident in the economy and are looking at not only spending their savings but also borrowing more.”
RateCity declined to release specific customer numbers for the period, citing commercial in confidence.
For loans and credit cards, RateCity found a double-digit rise in searches and applications from July.
The number of people shopping for a home loan increased 47 per cent in the September quarter, while applications for personal loans grew 53 per cent.
Credit card applications recorded a 50 per cent rise in the quarter.
In October 2008, a month after the collapse of the investment bank Lehman Brothers sparked the global financial panic, there was a 127 per cent spike in term deposits.
But that surge has since flattened, RateCity spokeswoman Michelle Hutchison said.
There was a six per cent decrease in applications for savings accounts and term deposits from July to August 2009 and a nine per cent decline from August to September.
“This shows that the trend is continuing for more borrowing and spending and less saving,” Ms Hutchison said.
“From June, we started to see the change occurring from Australian’s shopping for savings accounts and term deposits to shopping for loans and credit cards. But it wasn’t until July when savings and term deposit accounts started dropping.”
She said findings coincided with Australian Bureau of Statistics data that showed total personal finance commitments rose 4.1 per cent in August, seasonally adjusted, to $7.184 billion, from $6.903 billion in July.
However, housing finance for owner occupation fell 1.7 per cent to $16.543 billion in August from $16.831 billion in July.
The September personal finance figures are due to be released on November 11.
The RateCity survey covered the months before the Reserve Bank of Australia raised the official cash interest rate.
On October 6 the RBA became the first G20 central bank to hike rate when it took the cash interest rate to 3.25 per cent from three per cent – its first rate hike in 19 months.
Also that week, ABS data showed that the economy generated 40,600 new jobs in September, while the unemployment rate dropped by 0.1 percentage points to 5.7 per cent.